Family money
Documenting a private loan: checklist for interest, repayments and security
A private loan often starts with trust: a parent helps a child, friends finance a renovation together, or one person lends money to someone they know. Because the relationship is good, the written agreement is sometimes kept too short. “We will work it out” sounds friendly, but it is not useful when the interest rate changes, a payment is missed or one party later remembers the agreement differently.
A model contract makes the arrangement concrete. It describes how much is lent, what the money is for, which interest rate applies, how and when the debt is repaid, and what happens if a payment is missed. It does not guarantee that everyone will comply, but it makes rights, obligations and evidence clearer.
This article explains the clauses a model contract should contain, how to build an interest-rate range and how FLUX5 can help with the agreement, payments and record keeping. Treat any model as a starting point. For a large loan, mortgage security, business structure or dispute, involve a civil-law notary, lawyer or tax adviser.
Short answer
A sound private-loan model contract should include at least:
• the full details of lender and borrower;
• the amount, purpose and payment date;
• the interest rate, fixed-rate period and review mechanism;
• the term, repayment method and a concrete payment schedule;
• early-repayment, late-payment and acceleration terms;
• any security, such as a guarantee, pledge or mortgage right;
• tax treatment, information duties and how amendments are recorded;
• date, signatures and the appendices referred to by the agreement.
An interest-rate range is not a statutory tariff. It helps demonstrate why the selected rate fits comparable loans with the same term, security, risk and repayment method.
What is a private loan?
A private loan, or Dutch onderhandse lening, is a loan between parties without a standard bank credit agreement. The lender may be a parent, family member, friend or another private person. The loan may be unsecured, or it may form part of a family mortgage where a mortgage right is registered over a property.
“Private” does not mean informal or optional. A signed agreement can form the basis of the payment obligation. A mortgage right is different, however: it is not created merely by writing a sentence in the contract. It requires a notarial deed and registration in the public registers.
A private loan should also behave like a real loan. An amount that is never demanded back, has no repayment plan or is systematically forgiven may be assessed differently for tax and legal purposes from what the parties intended at the start.
The twelve parts of a good model contract
1. Parties and authority
Include the full names, dates of birth, addresses and contact details of lender and borrower. If there are several lenders, state the amount or share provided by each. For a company, include its legal name, Chamber of Commerce number and the person authorised to sign.
State whether a borrower is jointly and severally liable. With two partners, this makes a major difference: are both liable for the full debt, or each for half? Make the choice fit the ownership and relationship arrangements.
2. Amount, purpose and funding
Record the exact loan amount, currency and date on which the money becomes available. Describe the purpose: buying an own home, renovation, education, business use or a freely spendable purpose.
The purpose is not merely administrative. A loan for an own home can have different tax conditions from a consumer loan. Keep proof of payment and add a funding confirmation as an appendix.
3. Interest and rate reviews
Write the interest as an annual percentage and explain how it is calculated. State whether the rate is fixed for the full term, fixed until a certain date or reviewed periodically.
A useful clause also explains what happens at a review:
• on which date the rate is reconsidered;
• which comparable market loans are used;
• which adjustment applies for security and risk;
• how the new rate is recorded;
• what happens if the parties cannot agree.
Without these details, a dispute may arise over whether “market-conform” means “the lowest rate visible online today”. It does not. The loan terms must be comparable.
4. Interest-rate range and selected rate
Do not record a percentage without context. First build a defensible range. Compare at least:
• the purpose and type of loan;
• amount and remaining term;
• fixed-rate period;
• annuity, linear or interest-only structure;
• first-ranking, second-ranking or no security;
• the debt-to-property-value ratio;
• the borrower's credit risk and affordability.
Set a lower and upper boundary. The selected rate should sit within the range, and the reason for the selection should remain in the file. A family discount is not automatically wrong, but it must remain defensible. A rate that is too low can turn the foregone interest into a gift. An unreasonably high rate may also be treated as a different form of benefit or income.
5. Repayment method
State the repayment method explicitly:
• Annuity: a broadly level gross payment; at the start it contains relatively more interest and less principal repayment.
• Linear: a fixed principal amount is repaid each period, so interest and the total payment fall over time.
• Interest-only: only interest is paid during the term and the principal remains outstanding. This can be suitable in some situations, but requires a clear plan for the final repayment.
If the loan is used for an own home and mortgage interest relief is expected, additional conditions apply. A new own-home loan generally has to be repaid on an annuity or linear basis within 360 months and included in the tax return. A contract that only charges interest is not automatically a qualifying own-home loan.
6. Payment schedule and administration
Put the payment date, lender account and borrower account in the agreement. Attach an amortisation schedule showing interest, principal and remaining balance for every payment. If interest is calculated daily, describe the day-count method.
A schedule prevents both parties from remembering only a monthly amount and calculating differently later. Keep the bank proof or digital confirmation after every payment.
7. Extra repayments and early termination
Explain whether the borrower may make extra repayments at any time, must give notice or owes a fee. With family loans, penalty-free repayment is often preferred, but a lender may need predictable interest income.
Also state how an extra payment is allocated: first to overdue costs, then interest and then principal, or another order. Explain whether the extra repayment changes the monthly amount, the term or both.
8. Late payment and acceleration
A contract should not describe only the ideal scenario. State:
• when a payment is late;
• whether a notice and cure period applies;
• which statutory or contractual default interest applies;
• when reasonable costs may be charged;
• when the full loan becomes immediately due.
Keep the consequences proportionate. A short administrative mistake does not have to trigger acceleration. A structural arrears situation or loss of agreed security may justify a stronger response.
9. Security and ranking
An unsecured private loan has no priority over other creditors. Additional security may include a guarantee, pledge or mortgage right. For property, the ranking is especially important. A family member with a second-ranking mortgage is not automatically first in line if the property is sold.
A mortgage right is created through a notary and registration in the public registers. Do not write that a mortgage right already exists if only a private agreement has been signed. Instead, state that the parties intend to establish the security, who pays the costs and what happens if registration cannot be completed.
10. Death, separation and amendments
A family loan can be affected by personal events. What happens when the lender dies? Does the claim pass to the estate? What happens when two borrowers separate? Who remains liable?
Record every change in a signed addendum. An oral agreement to change the rate or defer repayments can be difficult to prove later. Keep the original contract, all addenda and the current schedule together.
11. Tax and credit information
State that each party remains responsible for its own tax return and information duties. A loan for an own home, a second home and a freely spendable loan may have different tax treatment. A loan can also affect BKR reporting or a future mortgage application.
A family mortgage that is not registered with BKR remains a financial obligation. Disclose it to a bank or adviser when asked. The contract is not a way to hide an existing loan or payment problem.
12. Signing and appendices
Have every party identify and sign every appendix with the date. Include at least the payment proof, amortisation schedule, rate analysis and security arrangements. Digital signing can be practical, but make sure identity, version and signing time are demonstrable.
Two examples
Example A: an unsecured €25,000 family loan
A parent lends €25,000 to a child for a renovation. The term is five years, the fixed rate is 5.5% and the loan is repaid on an annuity basis. In a pure annuity calculation, the gross monthly payment is about €478. The agreement includes an amortisation schedule, monthly payment, penalty-free extra repayment and a fourteen-day cure period after a missed payment.
The 5.5% in this example is not a current recommendation. The contract file should explain why the percentage fits an unsecured €25,000 loan with a five-year term and this borrower. The risk assessment may be different if the borrower has limited income, substantial existing obligations or provides security.
Example B: a €250,000 family mortgage
A family member lends €250,000 for an own home. The parties agree a thirty-year annuity term and a ten-year fixed-rate period. At an illustrative rate of 4.25%, the gross monthly payment is about €1,230. After ten years, the rate is supported again using the review clause.
If the family receives a second-ranking mortgage, the contract should cover ranking, the bank's consent, notarial costs and what happens on sale. If the loan is intended to qualify for mortgage interest relief, the repayment schedule must satisfy the tax conditions. A model contract structures the agreement; it does not replace the notarial deed.
How FLUX5 can help
A loose template gives you text. FLUX5 can structure the process around that text:
1. Collect the terms: parties, amount, purpose, term, fixed-rate period, repayment method and security sit in one file.
2. Show a rate range: FLUX5 can show an indicative range based on the loan type and chosen conditions. The user does not pick a percentage blindly, but sees why the rate moves up or down.
3. Generate the agreement: the selected terms are placed into an agreement and repayment schedule.
4. Sign the same version: both parties review and record approval of the same document.
5. Track payments: monthly payments and principal repayments are recorded so the current balance and payment history stay clear.
6. Keep evidence together: the contract, rate analysis, schedule and payment information remain available for annual administration and tax reporting.
FLUX5 does not independently decide what is legally or tax-wise correct for every situation. A rate range is an informed indication, not a binding ruling by the Belastingdienst and not a bank credit decision. A notary, lawyer or tax adviser should review a mortgage right, large loan, negative BKR record or complex family relationship.
What should not appear in a good model contract?
Avoid open wording such as “we will decide the rate later”, “we will pay when possible” or “the property is intended as security”. Those sentences leave the important points open. Also avoid an amortisation schedule that does not match the payments on the bank account.
Do not write that a mortgage right exists when only a private agreement has been signed. And do not use a model contract as a substitute for advice on gift tax, income tax, inheritance law or mortgage ranking.
Pre-signing checklist
• Are all parties fully identified?
• Is the amount demonstrably paid out?
• Is the loan purpose clearly described?
• Is the rate supported by a comparable range?
• Is the rate fixed or variable, and is the review mechanism written down?
• Does the repayment schedule match the agreed term?
• Are the payment date, accounts and administration arranged?
• Are extra repayment and late-payment consequences clear?
• Are security and ranking described correctly?
• Are death, separation and amendments covered?
• Do both parties know what must be disclosed for tax and mortgage applications?
• Are all appendices present and signed?
Frequently asked questions
Is a private-loan model contract legally valid?
A signed agreement can create a valid arrangement between the parties. The exact consequences depend on its contents and circumstances, and on whether additional formalities are required. A mortgage right requires a notarial deed and registration.
What interest rate can I charge on a family loan?
There is no universal family-loan percentage. Compare loans with the same amount, purpose, risk, security, term and repayment profile. Record the range and selected rate. A rate far below market can be treated as a gift, while a rate far above market is not automatically defensible either.
Does a private loan have to be registered with BKR?
That depends on the provider and the credit-registration rules. A loan from a private family member is not automatically registered in the same way as consumer credit from a participating provider. Even without a BKR record, disclose the loan when a bank or adviser asks about your obligations.
Do I need a notary?
Usually not for an ordinary unsecured private loan. You do need a notary to establish a mortgage right over property. A notary can also help structure complicated security, ranking or family arrangements.
Can the same model contract be used for a friend?
Yes. The core clauses are the same. For a loan outside the family, it is especially important to discuss security, default and communication before signing, because there is no family relationship to absorb a later conflict.
Conclusion
A good private-loan model contract is not a formality added at the end. It is the shared working document for the amount, interest, repayments, administration and solution if the original plan changes.
First choose a defensible interest-rate range, then record the selected rate and schedule, and make security clear. FLUX5 can connect these steps in one file: terms and rate indication, contract, signatures and payment records. For personal legal or tax questions, independent advice remains sensible.
Sources, accessed 6 August 2026:
• AFM: what to consider before taking out a loan
• AFM: make sure the loan is actually repaid
• BKR: frequently asked questions about credit registration
• Nibud: taking out a mortgage
• FLUX5: family mortgage and interest deduction
• FLUX5: market-conform interest for a family loan
This article is general information and not personal financial, tax or legal advice. A model contract does not guarantee tax acceptance or credit approval. Have large loans, mortgage rights and complex family arrangements reviewed by a qualified professional.